IA board clears separate subsidiary firm

TNNJun 29, 2004, 08.12pm IST

NEW DELHI: The Indian Airlines board on cleared a proposal to float a separate subsidiary to provide engineering and allied services. It would enter into joint ventures with companies in the private sector including airlines to undertake maintenance, repair and overhaul activities.

According to an Indian Airlines release, the management has been advised to initiate steps to obtain required clearances and approval for the formation of this subsidiary company from the Union government.

Indian Airlines has over the years set up an aircraft engineering maintenance infrastructure, which has a number of skilled personnel who carry out maintenance work related to aircraft including structural repairs and incorporation of major modifications.

On account of the rapid increase in maintenance and infrastructure cost, the traditional approach of airline operations to have their own engineering as a part of its set up has gradually changed, the release adds. This practice has also been followed by private airlines in India for over a decade.

The new move, according to the airlines, enables the operator to put greater attention to bring continuous improvement in the core business. This is also in line with the practice being followed by major airlines all over the world and more recently by Air India.

Indian Airlines hopes to now create an MRO set up to leverage the growing business opportunities of third party airlines for generation of extra revenue.